Senior Housing Finance Activity: Capital One Bank, Sunrise, Beech Street Capital

| January 24, 2013

Sunrise Announces Changes to 5.00% Junior Notes

Sunrise Senior Living, LLC announced Friday that in connection with the closing of the transactions by among Health Care REIT, Sunrise Senior Living, Brewer Holdco, Inc., Brewer Holdco Sub, Inc., and Red Fox, Inc., Sunrise delivered a notice to holders of its 5.00% Junior Subordinated Convertible Notes due 2041, pursuant to the April 20, 2011 indenture by and between Sunrise and the Bank of New York Mellon Trust Company, N.A., as trustee, of the Make-Whole Fundamental Change that occurred in connection with the completion of the transactions. The effective date of the Make-Whole Fundamental Change was Jan. 9, 2013.

The consideration due upon conversion of the notes will be cash equal to $1,443.67 per $1,000 principal amount of notes based on a conversion rate of 116.4251 in the case of a holder that elects to convert its notes in connection with a Make-Whole Fundamental Change, or cash equal to $1,338.12 per $1,000 principal amount of notes based on a conversion rate of 107.9130 in the case of a holder that elects to convert notes other than in connection with a Make-Whole Fundamental Change. Holders who wish to convert their notes must satisfy the requirements set forth in the April 2012 indenture.

Holders that don’t convert their notes during the Make-Whole Conversion Period (between the period beginning Jan. 9, 2013 to the business day immediately prior to the related Fundamental Change Purchase Date, which will be specified to holders and will be between 20-35 days following the date of the Fundamental Change Company Notice) and thus aren’t converting notes in connection with the Make-Whole Fundamental Change may convert their notes at any time prior to the close of business on March 29, 2041, the business day immediately preceding the maturity date of the notes. 

Capital One Leads Closing of $168.8 Million Secured Term Loan for SNF Acquisition

Capital One Bank announced on Tuesday it and arranged a $168.8 million five-year term loan for a healthcare real estate entity to facilitate the acquisition of a 25-property portfolio of skilled nursing facilities in Alabama, Florida, and Mississippi. Capital One Bank acted as the lead agent on the financing, providing a $63.8 million secured term loan. 

The portfolio was acquired by a newly-formed, privately-held entity and have been triple-net leased to affiliates of Gulf Coast Healthcare, LLC. The portfolio has more than 3,200 beds and offer skilled nursing and long-term care services including physical therapy, occupational therapy, speech therapy, dietary management, pain management, and Alzheimer’s care, among other rehabilitation treatments. 

Senior Housing Properties Trust Prices Public Offering of 10 Million Shares

Senior Housing Properties Trust (NYSE:SNH) announced on Wednesday that it had priced a public offering of 10 million common shares at $23.80 per share, and have granted underwriters a 30-day option to purchase up to an additional 1.5 million shares. 

The proceeds from the offering are expected to be used to repay amounts under its revolving credit facility and for general business purposes, including new acquisitions. The settlement of this offering is expected to occur on Jan. 28, 2013. 

Jefferies, Citigroup, and Wells Fargo Securities are joint bookrunning managers for this offering, with BofA Merrill Lynch, Morgan Stanley, RBC Capital Markets, and UBS Investment Bank as joint lead managers. The co-managers are BB&T Capital Markets, Janney Montgomery Scott, JMP Securities, and Oppenheimer & Co. 

Chartwell Announces Name & Logo Change

Chartwell Seniors Housing Real Estate Investment Trust (TSX:CSH.UN) announced on Friday that it has changed its name to Chartwell Retirement Residences, although it will continue to trade on the Toronto Stock Exchange as CSH.UN. The change is timed to coincide with the rebranding of the 42 retirement communities Chartwell acquired with Health Care REIT (NYSE:HCN) in May 2012.

The new name makes way for a more consistent translation in French to Chartwell Résidences Pour Retraités, says the REIT. In Ontario, long-term care communities will be branded distinctively as Chartwell Long Term Care Residences, and communities will begin reflecting the new name and logo as part of a national roll-out strategy throughout 2013. 

Beech Street Capital Closes $15.9 Million Refinance for Seattle Senior Living Community

Beech Street Capital, LLC announced recently it had closed a $15.9 million loan to refinance an independent and assisted living community in Newcastle, Wash. near Seattle.

With the maturity date approaching for Regency Newcastle, a 99-unit community, time was of the essence to close the refinancing, so Beech Street recommended that the borrowers pursue a Fannie Mae conventional senior housing loan and was able to close the transaction before the deadline will securing an attractive interest rate. 

The fixed-rate loan has a 10-year term, with 9.5 years yield maintenance and a 30-year amortizing schedule. James Sherman, Beech Street’s executive vice president of seniors housing, originated the transaction. 

Beech Street Announces $4 Billion Financing Activity in 2012

Beech Street Capital also announced that it provided $4.0 billion in multifamily financing in 2012—only its third year of operation—achieving a 100% annual growth rate for the last two years. “

We were determined this year to demonstrate that we could maintain our momentum,” says Grace Huebscher, Beech Street’s president and CEO. “Thanks to our growing relationships with Fannie Mae, Freddie Mac and FHA, the support of our customers, and the determination of our team to deliver on every single transaction, we succeeded.”

Beech Street saw significant growth across its business, with Fannie Mae financing growing 150% and the Freddie Mac business tripling. The financing firm also saw a surge in its FHA business. At year end, Beech Street’s servicing portfolio consisted of 643 loans and more than $7.3 billion.

Lancaster Pollard Closes $11 Million Loan for Florida CCRC

Lancaster Pollard was recently engaged by Epworth Village Retirement Center in Hialeah Fla. to realign the CCRC’s capital structure and develop a recapitalization plan to pay off two existing loans from the Department of Housing and Urban Development as well as to fund $1.4 million in repairs and improvements. 

The Columbus, Ohio-based financing firm selected a capital partner based on the ability to deliver the lowest cost and greatest flexibility for the $11 million loan, which has an interest rate nearly 4% lower than the previous blended coupon. This significantly decreases the overall interest expense for the CCRC.

Gerald Swiacki, senior vice president with Lancaster Pollard’s Atlanta office, headed the transaction. 

Mass Development Issues $3 Million Bond for CCRC

MassDevelopment has financed the expansion of a Longmeadow, Massachusetts continuing care retirement community with the issuance of a $3 million bond, according to the Banker & Tradesman

The bond was issued on behalf of Glenmeadow, Inc., a nonprofit CCRC that intends to use the proceeds to renovate its main building by updating public and office spaces, building an additional dining venue, expanding wellness activities space, and improving common areas.

People’s Bank purchased the bond. 


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Category: Finance and Development, Senior Care, Senior Housing

Comments (1)

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  1. Chris_Foley says:

    With the above announced deals, both large and small, there's some more evidence of a strong M&A market in the seniors housing space since there is money available for acquisitions & refinancings of CCRC's, SNF's and ALF's (not to mention a $230 million public offering from (NYSE:SNH) and $4 billion – with a "b" – 2012 financing activity from Beech Street alone. Similar to the article a few days ago from SHN http://seniorhousingnews.com/2013/01/22/senior-ca
    Chris Foley
    Sr. V. P.
    cfoley@Equity.net